Blockchain Capital, a prominent venture capital firm in the crypto space, has successfully raised a substantial $580 million for two new funds. This marks one of the largest fundraising announcements in the crypto industry this year (Ben Weiss, Fortune). The company, with a decade-long history of investing in crypto, displayed its resilience in a challenging market.

Venture Capital Pioneers

Blockchain Capital, previously known as Crypto Currency Partners, has earned its reputation as one of the pioneering venture capital firms exclusively focused on blockchain investments. With this latest fundraising effort, the firm reaffirms its commitment to supporting innovation within the blockchain ecosystem (Ben Weiss, Fortune).

Allocation of Funds

The raised capital will be strategically allocated to two distinct categories:

Early-Stage Fund: An impressive $380 million will be directed towards the early-stage fund, primarily intended for investments in seed or Series A rounds. This allocation demonstrates Blockchain Capital's dedication to fostering emerging blockchain startups (Ben Weiss, Fortune).

Opportunity Fund: The remaining $200 million will form the opportunity fund, designed to provide capital during the later stages of fundraising for startups. This balanced approach aims to cater to blockchain ventures at various development phases (Ben Weiss, Fortune).

Resilience Amid Market Challenges

Blockchain Capital initiated the fundraising for these two funds in the fourth quarter of 2021, just before the crypto market witnessed turbulence and subsequent crashes. Despite the market uncertainties, the fund raise officially concluded on Monday, with a remarkable $580 million secured, coming close to its initial $600 million target. Spencer Bogart, General Partner at Blockchain Capital, disclosed that the majority of limited partners investing in the funds are large family offices, followed by pensions, endowments, foundations, and other investment partners. Notably, many of these contributors are repeat investors who remain undeterred by recent market fluctuations. Bogart emphasized their resilience, stating, "We get very numb to those cycles over time" (Ben Weiss, Fortune).

A Glimpse of Hope

Blockchain Capital's successful fundraising provides a glimmer of hope for the crypto industry, which has seen a comparative downturn in funding for venture capital firms and startups. In the first half of 2023, venture capitalists invested only $2.3 billion in crypto startups, representing a 75% decrease from the same period in 2022, according to Pitchbook data. This challenging environment has caused some startups to face funding shortages, particularly those specializing in non-fungible tokens (NFTs) (Ben Weiss, Fortune).

However, it's worth noting that limited partners have not turned their backs on crypto entirely. CoinFund, another crypto-focused venture capital firm, raised $158 million in July to support blockchain startups. Similarly, Polychain Capital, a stalwart in the crypto VC landscape, recently had its first close, raising approximately $200 million for its fourth fund, with plans to reach a total of around $400 million (Ben Weiss, Fortune).

Blockchain Capital has already deployed a significant portion of the $580 million raised, with investments in companies like EigenLabs and RISC Zero. Unlike some crypto venture capital firms diversifying into other areas like artificial intelligence (AI), Blockchain Capital maintains its unwavering focus exclusively on the crypto sector. "We've got stuff that's working," Bogart affirmed, highlighting the firm's confidence in the crypto industry's potential for continued growth and innovation (Ben Weiss, Fortune).

Support from Visa

In addition to Fortune's coverage, Bloomberg reported that Blockchain Capital, with its existing $2 billion in assets under management, will utilize the fresh capital to back crypto startups in areas including decentralized finance and gaming as well as infrastructure, according to General Partner Kinjal Shah (Bloomberg). Furthermore, Yahoo Finance covered the story, emphasizing that Blockchain Capital's successful fundraising backed by Visa signals a positive outlook for crypto-focused venture capital, despite recent market challenges (Yahoo Finance).